India's Tata Technologies posts jump in profit in first results since listing

Tata Technologies

25/01/2024 11:59

BENGALURU, Jan 25 (Reuters) - India's Tata Technologies
 TATE.NS  reported a near-15% climb in profit in its first
results since going public, helped by strong demand from the
automobile sector.
    The unit of Tata Motors  TAMO.NS  reported a consolidated
net profit of 1.70 billion rupees ($20.5 million) for the
quarter ended Dec. 31, compared to 1.48 billion rupees a year
ago.
    The company, the first Tata Group entity to go public in
nearly two decades, was valued at $6.4 billion in a smashing
debut in November.
    Tata Technologies provides engineering and technology
services to auto, aero and heavy machinery makers.
    Analysts at JM Financial said companies such as Tata
Technologies stand to benefit from the automotive sector's push
towards electrification and digitisation.
    "We remain positive on customer spending in the automotive
vertical as original equipment manufacturers continue to pivot
towards electrification and other alternative propulsion
systems. The aerospace industry is looking upbeat, with a good
pickup in demand there," CEO Warren Harris said in a statement.
    The company said it won five large deals in the quarter,
including one contract valued at over $50 million.
        Its revenue from operations rose 14.7% to 12.89 billion
rupees, led by a 9.3% revenue growth in its services segment,
which accounted for nearly 78% of revenue.
  
        Meanwhile, expenses rose 14.5%, though it came in at a
lower 10.85 billion rupees. The company attributed it mainly to
higher purchases of technology solutions and employee-related
expenses.
  
    Shares of Tata Technologies closed marginally higher ahead
of the results. Though they have fallen 12.8% since listing,
they are still 129% higher than the initial public offer price
of 500 rupees.
    Rival KPIT Technologies  KPIE.NS  is set to report its
results on Tuesday.
    
($1 = 83.0820 Indian rupees)

 (Reporting by Rama Venkat in Bengaluru; Editing by Varun H K)
 ((ramavenkat.raman@thomsonreuters.com; https://twitter.com/ramavenkat0607;
 +91 8095218099;))